The Benefits of Credentialing by a Peer Association

<p>It is one thing to hire a firm or individual to conduct an appraisal in a bankruptcy
case, but another to later defend the dollar amount derived. Defending those values
is second in importance only to a correct or reasonable value. At issue may be the
methodology, testimony experience and general valuation education of the appraiser.
Credibility is derived from the experience of the individual, the adherence to the
standards and the testing organization by which one is accredited. This article will
identify the benefits of active involvement within the discipline by membership in an
appraisal association.

</p><p>Professional association membership is a way of indicating to the world that one is,
or is striving to be, a professional. But membership is only as good as the
participant's personal involvement. A membership may not have testing requirements
that

</p><p>are stringent enough to show competency and may not have continuing education requirements
to keep the individual current in the ever-changing areas of the profession.

</p><p>Maintaining a professional license may require continuing education and fees. These
can become burdensome in terms of time and money. It is tempting to eliminate the
membership. The choice for an appraiser is either to be a part of the process or
merely conduct business without the educational or networking participation. More "shingle
hangers" are created every week. They compete on price alone and damage the
ever-improving quality that has been stimulated by the implementation and continuing
education requirements associated with the <i>Uniform Standards of Professional Appraisal
Practice (USPAP).</i>

</p><h3>Beyond Mere Membership</h3>

<p>More significant than mere professional society membership is the level of
involvement. Active participation in the society's committees, publication of articles
in professional journals, and teaching are all elements that add to the expert's
credibility. These elements can be brought out during the expert's testimony. Also
significant is having passed a certification exam. Finally, an entire appraisal firm
can be judged by how many of its appraisers have achieved these standards. Appraisal
users may themselves need to be educated about the benefit and desirability of such
credentials.

</p><h3>Competitive and Cost Pressure</h3>

<p>Most accreditation societies require continuing education in addition to having members
meet USPAP standards. Appraisers or appraisal companies adjusting to competitive
pressures may eliminate value-added options such as continuing education. This may not
be obvious to the client, but could eventually sacrifice quality. Some other areas
that can be sacrificed include a comprehensive library, research, in-house training and
firm newsletters on the latest developments.

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<big><center><i>
The credentialed appraiser has made a substantial investment
in both time and money to meet the highest standards.
</i></center></big>

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</blockquote></blockquote>

<p>Many in the appraisal profession resisting the urge to trim these features lament
the inability to pass through their expenditures. So what's new? This has been the
case in many professions, and eventually it all evens out. There is always a lag
in the ability to raise client fees to meet the higher expenses of an operation.
Larger companies may be able to sustain this, whereas many good independent fee
appraisers may not.

</p><h3>Conclusion</h3>

<p>The need for an appraisal in a bankruptcy matter is typically to make a
monetary decision for the estate. The use of accredited appraisers allows the estate
to benefit from mandatory continuing education, experience requirements and resulting
credibility. The credentialed appraiser has made a substantial investment in both
time and money to meet the highest standards. While it may be possible to get
an opinion while avoiding the expense associated with a credentialed expert, most
workouts or chapter 11 plans will benefit from the involvement of an accredited
appraiser.

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